EXHIBIT 99.1
CLEAR CHANNEL OUTDOOR REPORTS FOURTH QUARTER AND FULL YEAR 2005 RESULTS
FULL YEAR REVENUES INCREASE 9%, FUELED BY GROWTH DOMESTICALLY AND ABROAD
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SAN ANTONIO, TEXAS FEBRUARY 21, 2006...Clear Channel Outdoor Holdings, Inc.
(NYSE: CCO) today reported results for its fourth quarter and year ended
December 31, 2005.
FOURTH QUARTER 2005 RESULTS
The Company reported revenues of $734.6 million in the fourth quarter of 2005, a
7% increase over the $685.7 million reported for the fourth quarter of 2004.
Clear Channel Outdoor's expenses increased 1% to $485.6 million during the
fourth quarter of 2005 compared to 2004. Included in the Company's expenses is
approximately $334.0 thousand of non-cash compensation.
Clear Channel Outdoor's income and diluted earnings per share, before cumulative
effect of a change in accounting principal, were $40.4 million and $0.12,
respectively, during the fourth quarter of 2005. This compares to income of $3.6
million or $0.01 per diluted share in 2004.
Clear Channel Outdoor's net income and diluted earnings per share were $40.4
million and $0.12, respectively, during the fourth quarter of 2005. This
compares to a net loss of $159.3 million or $0.45 per diluted share in the
fourth quarter of 2004.
FULL YEAR 2005 RESULTS
For the full year, Clear Channel Outdoor reported revenues of $2.7 billion, an
increase of 9% when compared to revenues of $2.4 billion for the same period in
2004. The Company's expenses increased 7% to $1.9 billion during the year
compared to 2004. Included in the Company's expenses is approximately $846.0
thousand of non-cash compensation expense. During 2005, the Company restructured
its business in France and recorded approximately $26.6 million in restructuring
charges.
The Company's income was $61.6 million or $0.18 per diluted share for 2005,
before cumulative effect of a change in accounting principal. This compares to
income of $7.5 million or $0.02 per diluted share in 2004, before cumulative
effect of a change in accounting principle.
The Company's net income was $61.6 million or $0.18 per diluted share for 2005.
This compares to a net loss of $155.4 million or $0.44 per diluted share in
2004. The 2004 loss was the result of a cumulative effect of a change in
accounting principle with the adoption of SEC Staff Announcement D-108.
"Clear Channel Outdoor ended the year on a high note, delivering revenue growth
of 7% and 9% in the fourth quarter and full-year, respectively," said Mark P.
Mays, Chief Executive Officer of Clear Channel Outdoor. "We successfully
completed our initial public offering in November and entered 2006 with a clear
focus and optimal capital structure. Looking ahead, the fundamentals of the
outdoor advertising business remain one of the most attractive in all of media,
and as a global leader, we are ideally positioned to capitalize on growth
opportunities both domestically and abroad."
"Virtually all of our business units delivered impressive results in 2005, and
we are particularly pleased with our performance in the Americas, which
generated 11% revenue growth for the full year," added Paul J. Meyer, Global
President and Chief Operating Officer. "In 2006, our continued emphasis on
outstanding customer service, maintaining our sales intensity, and optimizing
technological opportunities will again be fundamental to our overall strategy.
We also are extremely fortunate to have
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both superb assets and outstanding people executing that strategy. Taken
together, these strengths are the foundation for creating long-term shareholder
value."
REVENUE AND DIRECT OPERATING AND SG&A EXPENSES BY DIVISION
(In thousands) Three Months Ended % Year Ended %
December 31, DELTA December 31, DELTA
-------------------- ----------------------
2005 2004 2005 2004
--------- --------- ---------- ----------
Revenue
Americas $329,733 $291,345 13% $1,216,382 $1,092,089 11%
International Outdoor 404,874 394,387 3% 1,449,696 1,354,951 7%
--------- --------- ---------- ----------
CONSOLIDATED REVENUE $734,607 $685,732 7% $2,666,078 $2,447,040 9%
========= ========= ========== ==========
Direct Operating and SG&A Expenses by Division
Americas $181,086 $167,240 8% $ 677,268 $ 641,697 6%
International Outdoor 304,492 311,926 (2%) 1,206,833 1,120,077 8%
--------- --------- ---------- ----------
CONSOLIDATED DIVISIONAL OPERATING EXPENSES $485,578 $479,166 1% $1,884,101 $1,761,774 7%
========= ========= ========== ==========
Included in the Company's 2005 revenue and direct operating and SG&A expenses
are foreign exchange decreases of approximately $25.9 million and $23.7 million
for the fourth quarter and foreign exchange increases of approximately $8.6
million and $5.8 million for the full year as compared to the same time periods
of 2004.
AMERICAS (FORMERLY NAMED DOMESTIC OUTDOOR, ENCOMPASSING BOTH NORTH AND SOUTH
AMERICA)
The Company's Americas revenues increased $124.3 million, or 11%, during 2005
compared to 2004. The increase was mainly due to an increase in bulletin and
poster revenues attributable to increased rates during 2005. Increased revenues
from the Company's airport, street furniture and transit advertising displays
also contributed to the revenue increase. Growth occurred across the Company's
markets including strong growth in New York, Miami, Houston, Seattle, Cleveland
and Las Vegas. Strong advertising client categories for 2005 included
automotive, business and consumer services, entertainment and amusements, retail
and telecommunications.
Direct operating and SG&A expenses (excluding non-cash compensation expense of
$693 thousand and $102 thousand for 2005 and 2004, respectively) increased $35.0
million, or 5%, during 2005 compared to 2004. The increase is related to
increases in site lease expenses, commission expenses and direct production
expenses, all associated with the increase in revenue.
INTERNATIONAL OUTDOOR
International revenues increased $94.7 million, or 7%, during 2005 compared to
2004. Revenue growth was attributable to increases in the Company's street
furniture and transit revenues and the consolidation of Clear Media Limited (a
Chinese outdoor company). The Company also experienced improved yield on its
street furniture inventory during 2005 compared to 2004. Leading markets
contributing to the Company's international revenue growth were Italy, China and
Australia. The Company faced challenges in France throughout 2005, with revenues
declining from 2004. Strong advertising categories during 2005 were food and
drink, retail, media and entertainment, business and consumer services and
financial services.
Direct operating and SG&A expenses (excluding non-cash compensation expense of
$153 thousand and $14 thousand for 2005 and 2004, respectively) grew $86.6
million, or 8%, during 2005 compared to 2004, in part due to the consolidation
of Clear Media. The Company restructured its business in France during the third
quarter of 2005 and recorded approximately $26.6 million in restructuring costs.
Expenses associated with new contracts also contributed to the growth.
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FAS NO. 123 (R): SHARE-BASED PAYMENT
The Company adopted Statement of Financial Accounting Standards No. 123(R)
Share-Based Payment ("Statement 123(R)") on January 1, 2006 and anticipates that
it will result in an increase in operating expenses in the range of $5 to $8
million for the full-year of 2006.
CONFERENCE CALL
The Company will host a teleconference to discuss results today at 9:00 a.m.
Eastern Time. The conference call number is 866-564-7444 and the pass code is
8340480. Please call ten minutes in advance to ensure that you are connected
prior to the presentation. The teleconference will also be available via a live
audio cast on the Clear Channel website, located at www.clearchannel.com. A
replay of the call will be available for 72 hours after the live conference
call, beginning at 12:00 p.m. Eastern Time. The replay number is 888-203-1112
and the pass code is 8340480. The audio cast will also be archived on the
website and will be available beginning 24 hours after the call for a period of
one week.
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TABLE 1 - FINANCIAL HIGHLIGHTS OF CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND
SUBSIDIARIES - UNAUDITED
(In thousands, except Three Months Ended Twelve Months Ended
per share data) December 31, % December 31, %
------------------------------- ------- -------------------------------- -------
2005 2004 (DELTA) 2005 2004 (DELTA)
------------- --------------- ------- -------------- -------------- -------
REVENUE $ 734,607 $ 685,732 7% $ 2,666,078 $ 2,447,040 9%
Direct operating expenses (1) 353,859 337,897 1,342,307 1,262,317
Selling, general and administrative expenses 131,719 141,269 541,794 499,457
Corporate expenses 21,699 14,319 61,096 53,770
Depreciation and amortization 110,406 99,407 400,639 388,217
Gain on disposition of assets - net 574 9,946 3,488 10,791
------------- -------------- -------------- --------------
OPERATING INCOME 117,498 102,786 14% 323,730 254,070 27%
Interest expense - net 55,387 39,480 198,354 159,830
Equity in earnings (loss) of
nonconsolidated affiliates (64) (2,346) 9,844 (76)
Other income (expense) - net (2,572) (3,438) (12,291) (16,530)
------------- -------------- -------------- --------------
Income before income taxes, minority
interest and cumulative effect of a
change in accounting principle 59,475 57,522 122,929 77,634
Income tax benefit (expense):
Current (13,406) (29,903) (51,173) (23,422)
Deferred (334) (21,402) 5,689 (39,132)
------------- -------------- -------------- --------------
Income tax benefit (expense) (13,740) (51,305) (45,484) (62,554)
Minority interest expense, net of tax 5,324 2,639 15,872 7,602
------------- -------------- -------------- --------------
Income before cumulative effect of a change
in accounting principle 40,411 3,578 61,573 7,478
Cumulative effect of a change in accounting
principle, net of tax -- (162,858) -- (162,858)
------------- -------------- -------------- --------------
Net Income $ 40,411 $ (159,280) $ 61,573 $ (155,380)
============= ============== ============== ==============
Diluted per share amounts (2):
Diluted income before cumulative effect of
a change in accounting principle per
share $ .12 $ .01 $ .18 $ .02
============= ============== ============== ==============
Cumulative effect of a change in accounting
principle per share $ -- $ (.46) $ -- $ (.46)
------------- -------------- -------------- --------------
Diluted net income per share $ .12 $ (.45) $ .18 $ (.44)
============= ============== ============== ==============
Weighted average shares outstanding -
Diluted (2) 350,081 350,081 350,081 350,081
- ------------
(1) Non-cash compensation expense of $846 and $116 for the years ended 2005 and
2004, respectively, and $334 and $34 for the fourth quarter of 2005 and 2004,
respectively, are included in Direct operating expenses.
(2) Diluted per share amounts for 2005 are calculated on a pro forma basis
assuming the initial public offering
of 10% of the Company's stock occurred on January 1, 2005. Diluted net income
per share for full year 2005, based on actual weighted average shares
outstanding of 319,921, was $0.19 per share. 2004 diluted per share amounts are
calculated assuming the same pro forma weighted average shares outstanding in
2005.
TABLE 2 - SELECTED BALANCE SHEET INFORMATION - UNAUDITED
Selected balance sheet information for 2005 and 2004 was:
December 31, 2005 December 31, 2004
(In millions) ----------------- -----------------
Cash $ 108.6 $ 37.9
Due from Clear Channel Communications $ 0.1 $ 302.6
Total Current Assets $ 894.1 $ 1,107.2
Net Property, Plant and Equipment $ 2,153.4 $ 2,196.0
Total Assets $ 4,918.3 $ 5,240.9
Current Liabilities (excluding current portion of long-term debt) $ 653.0 $ 602.8
Long-Term Debt (including current portion of long-term debt) $ 227.8 $ 176.4
Debt with Clear Channel Communications $ 2,500.0 $ 1,463.0
Shareholders' Equity $ 1,209.4 $ 2,729.7
TABLE 3 - CAPITAL EXPENDITURES - UNAUDITED
Capital expenditures for the full year of 2005 and 2004 were:
(In millions) December 31, 2005 December 31, 2004
----------------- -----------------
Non-revenue producing $ 78.1 $ 70.1
Revenue producing 130.1 106.0
----------------- -----------------
Total capital expenditures $ 208.2 $ 176.1
================= =================
The Company defines non-revenue producing capital expenditures as those
expenditures that are required on a recurring basis. Revenue producing capital
expenditures are discretionary capital investments for new revenue streams,
similar to an acquisition.
TABLE 4 - LONG-TERM DEBT - UNAUDITED
At December 31, 2005, Clear Channel Outdoor had long-term debt of:
(In millions) December 31, 2005
-----------------
Bank Credit Facility $ 15.0
Debt with Clear Channel 2,500.0
Other Debt 212.8
-----------------
Total $ 2,727.8
=================
Leverage, defined as total debt, net of cash, divided by the trailing 12-month
OIBDAN, was 3.6x at December 31, 2005.
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SUPPLEMENTAL DISCLOSURE REGARDING NON-GAAP FINANCIAL INFORMATION
OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION (D&A), NON-CASH
COMPENSATION EXPENSE AND GAIN ON DISPOSITION OF ASSETS - - NET (OIBDAN)
The following tables set forth Clear Channel Outdoor's OIBDAN for the three
months and years ended December 31, 2005 and 2004. The Company defines OIBDAN as
net income adjusted to exclude non-cash compensation expense and the following
line items presented in its Statement of Operations: Cumulative effect of a
change in accounting principle, Income tax benefit (expense); Other income
(expense) - net; Minority interest expense, net of tax; Equity in earnings of
nonconsolidated affiliates; Interest expense; D&A; and, Gain on disposition of
assets - net.
The Company uses OIBDAN, among other things, to evaluate the Company's operating
performance. This measure is among the primary measures used by management for
planning and forecasting of future periods, as well as for measuring performance
for compensation of executives and other members of management. This measure is
an important indicator of the Company's operational strength and performance of
its business because it provides a link between profitability and cash flows
from operating activities. It is also a primary measure used by management in
evaluating companies as potential acquisition targets.
The Company believes the presentation of this measure is relevant and useful for
investors because it allows investors to view performance in a manner similar to
the method used by the Company's management. It helps improve investors' ability
to understand the Company's operating performance and makes it easier to compare
the Company's results with other companies that have different capital
structures, stock option structures or tax rates. In addition, this measure is
also among the primary measures used externally by the Company's investors,
analysts and peers in its industry for purposes of valuation and comparing the
operating performance of the Company to other companies in its industry.
Since OIBDAN is not a measure calculated in accordance with GAAP, it should not
be considered in isolation of, or as a substitute for, net income as an
indicator of operating performance and may not be comparable to similarly titled
measures employed by other companies. OIBDAN is not necessarily a measure of the
Company's ability to fund its cash needs. As it excludes certain financial
information compared with operating income and net income (loss), the most
directly comparable GAAP financial measures, users of this financial information
should consider the types of events and transactions, which are excluded.
As required by the SEC, the Company provides reconciliations below of OIBDAN and
for each segment to consolidated operating income; OIBDAN to net income, the
most directly comparable amounts reported under GAAP.
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Non-cash Depreciation Gain on
(In thousands) Operating compensation and disposition of
income (loss) expense amortization assets - net OIBDAN
------------- ------------ ------------ -------------- ----------
THREE MONTHS ENDED DECEMBER 31, 2005
Americas $ 95,107 $293 $ 53,540 $ -- $ 148,940
International Outdoor 43,516 41 56,866 -- 100,423
Corporate (21,699) -- -- -- (21,699)
Gain on disposition of assets - net 574 -- -- (574) --
--------- ---- --------- --------- ---------
Consolidated $ 117,498 $334 $ 110,406 $ (574) $ 227,664
========= ==== ========= ========= =========
THREE MONTHS ENDED DECEMBER 31, 2004
Americas $ 78,964 $ 30 $ 45,141 $ -- $ 124,135
International Outdoor 28,195 4 54,266 -- 82,465
Corporate (14,319) -- -- -- (14,319)
Gain on disposition of assets - net 9,946 -- -- (9,946) --
--------- ---- --------- --------- ---------
Consolidated $ 102,786 $ 34 $ 99,407 $ (9,946) $ 192,281
========= ==== ========= ========= =========
YEAR ENDED DECEMBER 31, 2005
Americas $ 358,555 $693 $ 180,559 $ -- $ 539,807
International Outdoor 22,783 153 220,080 -- 243,016
Corporate (61,096) -- -- -- (61,096)
Gain on disposition of assets - net 3,488 -- -- (3,488) --
--------- ---- --------- --------- ---------
Consolidated $ 323,730 $846 $ 400,639 $ (3,488) $ 721,727
========= ==== ========= ========= =========
YEAR ENDED DECEMBER 31, 2004
Americas $ 263,772 $102 $ 186,620 $ -- $ 450,494
International Outdoor 33,277 14 201,597 -- 234,888
Corporate (53,770) -- -- -- (53,770)
Gain on disposition of assets - net 10,791 -- -- (10,791) --
--------- ---- --------- --------- ---------
Consolidated $ 254,070 $116 $ 388,217 $ (10,791) $ 631,612
========= ==== ========= ========= =========
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RECONCILIATION OF OIBDAN TO NET INCOME
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------------ -------------------------
(In thousands) 2005 2004 2005 2004
--------- ----------- ---------- -----------
OIBDAN $ 227,664 $ 192,281 $ 721,727 $ 631,612
Non-cash compensation expense 334 34 846 116
Depreciation & amortization 110,406 99,407 400,639 388,217
Gain on disposition of assets - net 574 9,946 3,488 10,791
--------- ----------- ---------- -----------
Operating Income 117,498 102,786 323,730 254,070
Interest expense 55,387 39,480 198,354 159,830
Equity in earnings of nonconsolidated affiliates (64) (2,346) 9,844 (76)
Other income (expense) - net (2,572) (3,438) (12,291) (16,530)
--------- ----------- ---------- -----------
Income before income taxes, minority interest and cumulative effect of
a change in accounting principle 59,475 57,522 122,929 77,634
Income tax (expense) benefit:
Current (13,406) (29,903) (51,173) (23,422)
Deferred (334) (21,402) 5,689 (39,132)
Minority interest expense 5,324 2,639 15,872 7,602
--------- ----------- ---------- -----------
Income before cumulative effect of a change in accounting principle 40,411 3,578 61,573 7,478
Cumulative effect of a change in accounting principle, net of tax of
$113,173 in 2004 -- (162,858) -- (162,858)
--------- ----------- ---------- -----------
Net Income (loss) $ 40,411 $ (159,280) $ 61,573 $ (155,380)
========= =========== ========== ===========
ABOUT CLEAR CHANNEL OUTDOOR HOLDINGS
Clear Channel Outdoor, headquartered in San Antonio, Texas, is a global leader
in the outdoor advertising industry providing clients with advertising
opportunities through billboards, street furniture displays, transit displays,
and other out-of-home advertising displays
For further information contact:
Investors - Randy Palmer, Senior Vice President of Investor Relations at
(210)832-3315 or Media - - Lisa Dollinger, Chief Communications Officer, (210)
832-3474 or visit our web site at www.clearchanneloutdoor.com.
CERTAIN STATEMENTS IN THIS DOCUMENT CONSTITUTE "FORWARD-LOOKING STATEMENTS"
WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH
FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND
OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF
CLEAR CHANNEL OUTDOOR TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS,
PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING
STATEMENTS. THE WORDS OR PHRASES "GUIDANCE," "BELIEVE," "EXPECT," "ANTICIPATE,"
"ESTIMATES" AND "FORECAST" AND SIMILAR WORDS OR EXPRESSIONS ARE INTENDED TO
IDENTIFY SUCH FORWARD-LOOKING STATEMENTS. IN ADDITION, ANY STATEMENTS THAT
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REFER TO EXPECTATIONS OR OTHER CHARACTERIZATIONS OF FUTURE EVENTS OR
CIRCUMSTANCES ARE FORWARD-LOOKING STATEMENTS.
VARIOUS RISKS THAT COULD CAUSE FUTURE RESULTS TO DIFFER FROM THOSE EXPRESSED BY
THE FORWARD-LOOKING STATEMENTS INCLUDED IN THIS DOCUMENT INCLUDE, BUT ARE NOT
LIMITED TO: CHANGES IN BUSINESS, POLITICAL AND ECONOMIC CONDITIONS IN THE U.S.
AND IN OTHER COUNTRIES IN WHICH CLEAR CHANNEL OUTDOOR CURRENTLY DOES BUSINESS
(BOTH GENERAL AND RELATIVE TO THE ADVERTISING INDUSTRY); FLUCTUATIONS IN
INTEREST RATES; CHANGES IN OPERATING PERFORMANCE; SHIFTS IN POPULATION AND OTHER
DEMOGRAPHICS; CHANGES IN THE LEVEL OF COMPETITION FOR ADVERTISING DOLLARS;
FLUCTUATIONS IN OPERATING COSTS; TECHNOLOGICAL CHANGES AND INNOVATIONS; CHANGES
IN LABOR CONDITIONS; CHANGES IN GOVERNMENTAL REGULATIONS AND POLICIES AND
ACTIONS OF REGULATORY BODIES; FLUCTUATIONS IN EXCHANGE RATES AND CURRENCY
VALUES; CHANGES IN TAX RATES; AND CHANGES IN CAPITAL EXPENDITURE REQUIREMENTS
AND ACCESS TO CAPITAL MARKETS. OTHER UNKNOWN OR UNPREDICTABLE FACTORS ALSO COULD
HAVE MATERIAL ADVERSE EFFECTS ON CLEAR CHANNEL OUTDOOR'S FUTURE RESULTS,
PERFORMANCE OR ACHIEVEMENTS. IN LIGHT OF THESE RISKS, UNCERTAINTIES, ASSUMPTIONS
AND FACTORS, THE FORWARD-LOOKING EVENTS DISCUSSED IN THIS DOCUMENT MAY NOT
OCCUR. YOU ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING
STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE STATED, OR IF NO DATE IS STATED, AS
OF THE DATE OF THIS DOCUMENT. OTHER KEY RISKS ARE DESCRIBED IN CLEAR CHANNEL
OUTDOOR'S REPORTS AND OTHER DOCUMENTS FILED WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION, INCLUDING IN THE SECTION ENTITLED "RISK FACTORS" FOUND ON
PAGE 13 OF CLEAR CHANNEL OUTDOOR'S PROSPECTUS DATED NOVEMBER 10, 2005 AND FILED
WITH THE SEC ON NOVEMBER 14, 2005 UNDER RULE 424 OF THE SECURITIES ACT. EXCEPT
AS OTHERWISE STATED IN THIS DOCUMENT, CLEAR CHANNEL OUTDOOR DOES NOT UNDERTAKE
ANY OBLIGATION TO PUBLICLY UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS
BECAUSE OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
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